Crandall Realty & Securities Co. v. Tanquary

23 Colo. App. 564
Colorado Court of Appeals·Decided April 15, 1912·No. No. 3874·Published·Cited by 1 cases

Opinion

Cunningham, Presiding Judge.

The trial court sustained a general demurrer to the amended complaint of the plaintiff, and thereafter, plaintiff electing to stand on its amended complaint, entered judgment- against it, dismissing its bill, and for costs. From this judgment plaintiff, who is plaintiff in error here, brings the case to this court for review. It is only necessary for us, in order to properly dispose of this case, to determine whether the amended complaint states [565] a cause of action or not. We shall therefore, as succinctly as possible, set forth its salient allegations.

From the amended complaint we learn that one Lucy Ann Crandall, who was upwards of eighty years of age, enfeebled in mind and body, and wholly dependent upon others in her business affairs, in May, 1902, permitted Nathan Q. Tanquary, an attorney-at-law residing in the city of Denver, -to organize a corporation known as The Crandall Investment Company, to which corporation she conveyed real property of the aggregate 'value of $300,000; that at and long prior to the time of the organization of. this company the said Tanquary occupied a fiduciary relation to Mrs. Crandall, was her attorney in all of her business affairs, and she relied exclusively upon his advice in such matters; that Tanquary became one of the directors of this corporation, and received stock in it of the value of $5,000, the other directors being Dan Gr. Kirshbaum, a nephew of Mrs. Cr.andall, and the third director and president of the company, was Mrs. Crandall herself. But it is charged that she, because of her physical and mental infirmities, which took her frequently for long periods from the state, was at all times but a nominal director. Kirshbaum held all of the offices not held by Tanquary, except that of president. It is further charged in the complaint that the corporation was organized for the sole and only purpose of putting the defendant Tanquary in complete control of Mrs. Crandall’s property for his own aggrandizement; that he absolutely dominated and controlled the company, without her knowledge or consent. It further appears from the complaint that Kirshbaum died, and that after his death, for a time, Tanquary controlled absolutely the corporation, holding all the offices except that of president, and receiving a salary of $5,000 per annum; that after a time a non-resident brother of Mrs. Crandall was made director, to. take the place made vacant by the [566] death, of the nephew. This brother was also made secretary and vice-president of the company; he was in Colorado only a few times, during the time he held these offices, and then but for a few days at a time. Later this non-resident brother resigned, and was succeeded by a sister of Mrs. Crandall, who, because of her lack of all knowledge pertaining to the affairs of the company, became and was but a nominal officer, the whole power and control of the company being exercised either directly or indirectly by Tanquary; that in January, 1905, Mrs. Crandall was adjudged insane, and her death occurred during the same month; that for more than two years immediately prior to her death, Mrs. Crandall was absent from the state much of the time, and for more than two years immediately preceding January, 1905, Tanquary had unrestrained control of the corporation, and all the other property belonging to Mrs. Crandall. Four months after Mrs. Crandall’s death Tanquary resigned all offices held by him in the corporation, and ceased all connection with the same; that no account or report of his doings in connection with said corporation was ever made by Tanquary. Following his resignation new officers were elected to take charge of the company, but received no aid from Tanquary in their investigation of its affairs. Not until December, 1906, so the bill charges, did the officers of the investment company learn of the irregularities of the defendant, which, according to the allegations, consisted in his malicious and fraudulent conversion to his own use of large sums of money belonging to the company, and to Mrs. Crandall, and the paying of large sums of money to himself for services never performed, and the misappropriation of property and effects, the exact language of the bill being:

“That during the period of time between April 29, 1902, and January 30, 1905, being the time during which he (Tanquary) was in control of the affairs of the said [567] The Crandall Investment Company, as aforesaid, defendant Tanqnary maliciously, fraudulently and with willful deceit, converted to his own use large sums of money belonging to said corporation and said Crandall, and unlawfully and fraudulently paid himself large sums of money for services purported to have been, but which were not, performed by him, and in divers other ways wasted the assets of the said last named corporation, and of said Crandall, and misappropriated its and her property and effects.”

It is elsewhere charged in that bill that Tanquary misappropriated money to the aggregate amount of $35,000, in addition to the value of the stock of the company, which was issued to him at the time of the organization of the company, and which it is alleged is worth $5,000. There are other allegations in' the complaint, which was voluminous, that we.need not summarize.

The prayer of the complaint, which was filed December 7, 1908, asks that Tanquary be compelled to account for . the moneys in his hands belonging to the company, and for ■ judgment against him for any balance remaining in his hands, with interest thereon, and that he be required to transfer and convey to the plaintiff any and all property found to have been acquired by him, either in his own name, or in the name of others, by through, or with the assets of the said The Crandall Investment Company, for costs, and other proper relief.

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Crandall Realty & Securities Co. v. Tanquary, 23 Colo. App. 564 (Colo. Ct. App. 1912).

23 Colo. App. 564 (Crandall Realty & Securities Co. v. Tanquary) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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